JPMorgan amends tax treatment for Caterpillar‑linked notes

Rhea-AI Filing Summary

JPMorgan Chase Financial Company LLC amended the pricing supplement for its Auto Callable Contingent Interest Notes linked to Caterpillar Inc. by replacing the "Tax Treatment" section with Annex A. The amendment states the issuer intends to treat the notes as prepaid forward contracts with associated contingent coupons for U.S. federal income tax purposes and to treat Contingent Interest Payments as ordinary income. It cites advice from Davis Polk & Wardwell LLP but notes the IRS or a court could adopt other reasonable treatments, which could materially affect timing and character of income, and that subsequent Treasury/IRS guidance could have retroactive effect. For Non-U.S. Holders the amendment notes withholding agents generally will withhold at 30% on Contingent Interest Payments unless reduced by treaty and discusses potential applicability and a company determination regarding Section 871(m). The notes mature on May 4, 2028.

Insights

Tax Counsel

Amendment clarifies issuer's intended tax position but retains IRS/court uncertainty.

The document states the issuer will treat the notes as prepaid forward contracts with associated contingent coupons, and Contingent Interest Payments as ordinary income, relying on advice from Davis Polk & Wardwell LLP. This is a defensible position but not binding on tax authorities.

Key dependency is potential Treasury/IRS guidance and the 2007 notice referenced; any new guidance could change timing or character of income, possibly retroactively. Holders should confirm treatment with their own advisors because withholding practice for Non‑U.S. Holders (generally 30%) and Section 871(m) exposure remain open questions.

Key Figures

Registration Nos.: 333-293684 and 333-293684-01 CUSIP: 46660TGT1 Maturity: May 4, 2028 +3 more

6 metrics

Registration Nos. 333-293684 and 333-293684-01 Registration statement numbers shown on the amendment

CUSIP 46660TGT1 Identifier for the notes

Maturity May 4, 2028 Notes due date as stated in the amendment

Withholding rate 30% General withholding on Contingent Interest Payments to Non‑U.S. Holders

Issuer tax position prepaid forward contracts with associated contingent coupons Issuer's stated U.S. federal income tax treatment in Annex A

Section 871(m) exclusion date January 1, 2027 IRS notice excludes certain instruments issued prior to this date from Section 871(m) scope

Key Terms

prepaid forward contracts, Contingent Interest Payments, Section 871(m), Form W-8, +1 more

5 terms

prepaid forward contracts financial

"treat the notes for U.S. federal income tax purposes as prepaid forward contracts"

Contingent Interest Payments financial

"any Contingent Interest Payments as ordinary income"

Contingent interest payments are interest amounts a borrower only pays if certain conditions are met, such as hitting revenue targets, completing a sale, or reaching a cash threshold. For investors, these payments change the timing and size of expected cash flows—like a loan whose extra charges kick in only if a business performs a certain way—so they affect risk, valuation and how much cash a company has available for growth or dividends.

Section 871(m) regulatory

"Section 871(m) of the Code and Treasury regulations promulgated thereunder"

A U.S. tax rule that treats certain payments from financial contracts (like options, swaps, and other instruments that mimic stock dividends) to non-U.S. investors as if they were direct dividends, requiring U.S. withholding tax. It matters to investors because it can reduce net returns on offshore trades that replicate U.S. equity income and may change pricing or counterparty behavior—think of it as a hidden sales tax that applies when a substitute payment acts like a dividend.

Form W-8 regulatory

"if an applicable Form W-8 is provided"

delta of one financial

"instruments issued prior to January 1, 2027 that do not have a delta of one"

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What tax change does the JPM (JPM) amendment make to the notes?

The amendment replaces the pricing supplement's Tax Treatment section with Annex A, stating the issuer will treat the notes as prepaid forward contracts. It also states Contingent Interest Payments will be treated as ordinary income and cites counsel Davis Polk & Wardwell LLP.

Will Non-U.S. holders of JPM notes face withholding tax?

Yes; withholding agents generally will withhold at 30% on Contingent Interest Payments absent treaty relief. The amendment notes withholding agents (and the issuer if the agent) intend to withhold and holders must meet Form W-8 certification requirements.

Does Section 871(m) apply to these JPM notes?

The issuer determined Section 871(m) should not apply to the notes, and counsel agrees with that view. The amendment warns the IRS could disagree and that application depends on facts, including any related transactions involving the Underlying Security.

Could future IRS or Treasury guidance change tax treatment for JPM notes?

Yes; the amendment cites a prior Treasury/IRS notice and warns that future regulations or guidance could materially affect tax consequences, possibly with retroactive effect. Holders are advised to consult their tax advisers regarding potential changes.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Accepted by SEC EDGAR 05/07/2026 - 07:01 PM Learn about SEC filing dates

May 7, 2026 Registration Statement Nos. 333-293684 and 333-293684-01; Rule 424(b)(3)
Amendment no. 1 to pricing supplement dated April 30, 2026 to product supplement no. 3-I dated April 17, 2026 and the prospectus and
prospectus supplement, each dated April 17, 2026
JPMorgan Chase Financial Company LLC
Structured Investments
Auto Callable Contingent Interest Notes Linked to the
Common Stock of Caterpillar Inc. due May 4, 2028
Fully and Unconditionally Guaranteed by JPMorgan Chase & Co.
The section entitled “Tax Treatment” in the pricing supplement dated April 30, 2026, related to the notes referred to
above (the “pricing supplement”), is amended, restated and superseded in its entirety by the section entitled “Tax
Treatment” in Annex A to this amendment.
CUSIP: 46660TGT1
Investing in the notes involves a number of risks. See “Risk Factors” beginning on page S-2 of the accompanying
prospectus supplement, “Risk Factors” beginning on page PS-12 of the accompanying product supplement and
“Selected Risk Considerations” beginning on page PS-5 of the pricing supplement.
Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved
of the notes or passed upon the accuracy or the adequacy of this amendment, the pricing supplement or the accompanying
product supplement, prospectus supplement and prospectus. Any representation to the contrary is a criminal offense.
The notes are not bank deposits, are not insured by the Federal Deposit Insurance Corporation or any other governmental agency
and are not obligations of, or guaranteed by, a bank.
You should read this amendment together with the pricing supplement and the related product supplement, prospectus
supplement and prospectus, each of which can be accessed via the hyperlinks below. Please also see “Additional Terms Specific
to the Notes” in the pricing supplement.
● Pricing supplement dated April 30, 2026:
http://www.sec.gov/Archives/edgar/data/19617/000121390026051402/ea0288913-01_424b2.htm
● Product supplement no. 3-I dated April 17, 2026:
http://www.sec.gov/Archives/edgar/data/19617/000121390026045198/ea0285802-20_424b2.pdf
● Prospectus supplement and prospectus, each dated April 17, 2026:
http://www.sec.gov/Archives/edgar/data/19617/000095010326005889/crt_dp245141-424b2.pdf

PS-1 | Structured Investments
Auto Callable Contingent Interest Notes Linked to the Common Stock of
Caterpillar Inc.
Annex A
Tax Treatment
You should review carefully the section entitled “United States Federal Taxation” in the accompanying prospectus supplement. In
determining our reporting responsibilities we intend to treat (i) the notes for U.S. federal income tax purposes as prepaid forward
contracts with associated contingent coupons and (ii) any Contingent Interest Payments as ordinary income, as described in the section
entitled “United States Federal Taxation — Tax Consequences to U.S. Holders — Program Securities Treated as Prepaid Financial
Contracts with Associated Coupons” in the accompanying prospectus supplement. Based on the advice of Davis Polk & Wardwell LLP,
our special tax counsel, we believe that this is a reasonable treatment, but that there are other reasonable treatments that the IRS or a
court may adopt, in which case the timing and character of any income or loss on the notes could be materially affected. In addition, in
2007 Treasury and the IRS released a notice requesting comments on the U.S. federal income tax treatment of “prepaid forward
contracts” and similar instruments. The notice focuses in particular on whether to require investors in these instruments to accrue
income over the term of their investment. It also asks for comments on a number of related topics, including the character of income or
loss with respect to these instruments and the relevance of factors such as the nature of the underlying property to which the
instruments are linked. While the notice requests comments on appropriate transition rules and effective dates, any Treasury
regulations or other guidance promulgated after consideration of these issues could materially affect the tax consequences of an
investment in the notes, possibly with retroactive effect. The discussions above and in the accompanying prospectus supplement do
not address the consequences to taxpayers subject to special tax accounting rules under Section 451(b) of the Code. You should
consult your tax adviser regarding the U.S. federal income tax consequences of an investment in the notes, including possible
alternative treatments and the issues presented by the notice described above.
Non-U.S. Holders — Tax Considerations. The U.S. federal income tax treatment of Contingent Interest Payments is uncertain, and
although we believe it is reasonable to take a position that Contingent Interest Payments are not subject to U.S. withholding tax (at least
if an applicable Form W-8 is provided), it is expected that withholding agents will (and we, if we are the withholding agent, intend to)
withhold on any Contingent Interest Payment paid to a Non-U.S. Holder generally at a rate of 30% or at a reduced rate specified by an
applicable income tax treaty under an “other income” or similar provision. We will not be required to pay any additional amounts with
respect to amounts withheld. In order to claim an exemption from, or a reduction in, the 30% withholding tax, a Non-U.S. Holder of the
notes must comply with certification requirements to establish that it is not a U.S. person and is eligible for such an exemption or
reduction under an applicable tax treaty. If you are a Non-U.S. Holder, you should consult your tax adviser regarding the tax treatment
of the notes, including the possibility of obtaining a refund of any withholding tax and the certification requirement described above.
Section 871(m) of the Code and Treasury regulations promulgated thereunder (“Section 871(m)”) generally impose a 30% withholding
tax (unless an income tax treaty applies) on dividend equivalents paid or deemed paid to Non-U.S. Holders with respect to certain
financial instruments linked to U.S. equities or indices that include U.S. equities. Section 871(m) provides certain exceptions to this
withholding regime, including for instruments linked to certain broad-based indices that meet requirements set forth in the applicable
Treasury regulations. Additionally, a recent IRS notice excludes from the scope of Section 871(m) instruments issued prior to January
1, 2027 that do not have a delta of one with respect to underlying securities that could pay U.S.-source dividends for U.S. federal
income tax purposes (each an “Underlying Security”). Based on certain determinations made by us, our special tax counsel is of the
opinion that Section 871(m) should not apply to the notes with regard to Non-U.S. Holders. Our determination is not binding on the
IRS, and the IRS may disagree with this determination. Section 871(m) is complex and its application may depend on your particular
circumstances, including whether you enter into other transactions with respect to an Underlying Security. You should consult your tax
adviser regarding the potential application of Section 871(m) to the notes.
In the event of any withholding on the notes, we will not be required to pay any additional amounts with respect to amounts so withheld.